IMF Accepts Pakistan’s Request to Reschedule Sixth Review of $6 Billion Loan Program

The Executive Board of the International Monetary Fund (IMF) has rescheduled the assessment of the Sixth Review and the delivery of a $1 billion tranche under the Extended Fund Facility (EFF) after a request from the Pakistani authorities.

The spokesman for the Ministry of Finance, Muzammil Aslam, tweeted that the IMF has approved the request to reschedule the meeting of the Board of Directors.

When asked about the new date, the IMF Resident Chief in Pakistan, Esther Perez Ruiz, told reporters, “The Board meeting for consideration and eventual approval of the sixth review under the EFF is being postponed at the request of the authorities. The new date is yet to be determined”.

Initially planned for 12 January 2022, the IMF’s Executive Board has taken out Pakistan’s case for the completion of the Sixth Review after the Ministry of Finance had formally requested the global lender to postpone the approval of the review until either the end of January 2022 or early February 2022.

An official statement by the Ministry read that the government has introduced both the amended Finance and SBP Autonomy bills in the National Assembly, adding that as soon as the procedural formalities are completed, the IMF board will consider it for approval.

The bills must be cleared for the IMF Executive Board to resume Pakistan’s $6 billion loan program. The government hopes to pass the bills before the meeting of the IMF’s Board of Directors on 12 January. If passed, the bills will help to generate more revenues to the tune of Rs. 343 billion or 0.6 percent of the GDP through the removal of sales tax exemptions.

The Upper House of Parliament (Senate) is finalizing its recommendations on the finance (supplementary) bill, under which the government has proposed the withdrawal of tax exemptions. Contrarily, the passing of the SBP Amendment Bill may take some time because it requires the consent of both the Houses of Parliament, which implies that the Treasury benches will have to design an effective strategy to ensure its passage.